Shake-up at Kremlin won't derail summit

Published 4:00 am, Monday, August 24, 1998

1998-08-24 04:00:00 PDT RUSSIA -- MOSCOW - Another drastic shake-up in the Kremlin left U.S. officials hesitant Monday to pledge their unqualified support for President Boris Yeltsin's leadership.

But President Clinton intends to go ahead with his planned Moscow summit next week, one that is programmed to give him some access to Yeltsin's political foes and possibly a chance to address the Russian people.

Having ridden the ups and downs of Yeltsin's impulsive rule in the past, administration officials were taking some comfort in his recall of Victor Chernomyrdin as prime minister.

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Yeltsin said in a televised address Monday he recalled Chernomyrdin to head the government because an experienced leader was needed to tackle Russia's burgeoning crisis and restore political and economic stability.

Chernomyrdin, who was Yeltsin's prime minister for five years before being fired in March, faces an unprecedented economic crisis, a feisty parliament and a public skeptical that change at the top can improve its lot.

One Chernomyrdin colleague, Alexander Shokhin, said it was unlikely that prominent economic reformers would be in the new government.

"It is all too difficult to carry out any reforms," said one of those reformers, Boris Nemtsov, who announced his resignation from the government. "In the conditions of such an ugly market, where competition is nonexistent, monopolies are rampant, where rules are few."

Chernomyrdin's reappointment came one week after the Russian government effectively devalued its national currency, the ruble, and announced it would restructure the country's short-term debts.

The ruble dropped 0.135 against the dollar on the interbank currency exchange Monday, to close sharply down at 7.14 rubles to the dollar.

In his address to the nation a day after he dismissed the government of Prime Minister Sergei Kiriyenko on Sunday, Yeltsin suggested Chernomyrdin might be the best candidate to succeed him when his presidential term expires in 2000.

"(Chernomyrdin's) main advantages are decency, honesty and thoroughness," Yeltsin said. "I think these qualities will be the decisive argument in the presidential elections."

President Clinton was due in Moscow for a summit Sept. 1, a meeting that Yeltsin's spokesman said Monday was still very important despite the dismissal of the Russian government Sunday.

Kiriyenko, 36, a former banker, had won respect from Western economists and some Russians even though he failed to stem the collapse of the Russian stock market and the steady degradation of the economy.

Kiriyenko told reporters he did not regret his time as prime minister and said the new government would also have to take unpopular decisions to overcome Russia's economic crisis.

Yeltsin asked parliament to approve his candidate.

"The main priority is not to allow any steps backwards, to maintain stability. Today we need people known as heavyweights. I consider the experience and weight of Chernomyrdin essential," Yeltsin said.

"I ask (parliamentary) deputies, regional leaders and all the citizens of Russia to understand me and to support my decision. Today's situation is not the time for long discussion. And the main thing for all of us is the destiny of Russia, stability and normal conditions for Russia's citizens."

Parliamentary leaders announced immediately that they would not convene a plenary session for at least a week and asked for more time to consider the appointment.

Chernomyrdin is the same 60-year-old former Communist Party bureaucrat whom Yeltsin fired March 23 because he

"lacked dynamism and initiative."

Even by Yeltsin's standards, the turnabout is shocking. Russia is sinking in a debt, currency and banking crisis that promises to get worse before it gets better.

Investors, who dislike surprises even more than they favor economic reforms, are in full flight. Chernomyrdin will be hard-pressed to stop them.

"It smacks of panic," said Adrian Owens of Julius Baer Investments in London, reacting to Yeltsin's latest move. "Russian debt and the ruble will remain very much under pressure."

"It is strange to swap somebody who did nothing in five months for somebody who did nothing in five years," liberal deputy Vladimir Lukin said.

The United States' priority is that necessary economic reforms move forward, said P.J. Crowley, spokesman for Clinton's National Security Council. "Those policies are not specifically based on personality," he said.

Chernomyrdin started consultations on the makeup of the new government early Monday.

He spoke with regional leaders, including Gen. Alexander Lebed, the presidential hopeful who is governor of the Krasnoyarsk region of Siberia. Chernomyrdin was expected to consult with parliamentary leaders later Monday.

Although Chernomyrdin is generally respected in political and business circles, the sudden change seemed likely to further undermine confidence in Yeltsin's leadership and do nothing to pick up the spirits of Russians who have gone months without wages.

Kremlin spokesman Sergei Yastrzhembsky said market reforms would stay on course, but added: "From the point of view of practice, of implementing practical measures, we must expect serious changes."

Chernomyrdin, who headed the Gazprom national gas monopoly during the Soviet era, was Yeltsin's prime minister and steady right-hand man from December 1992 until this March, when the president said Russia needed new, more energetic leadership.